Multiple offers seems to be the norm in our Austin market these days. Seller’s are receiving 10-20 offers on their home within the first few days. Buyers are paying 20 percent and more over the asking price in many instances. And, they are beginning to wonder if they are paying too much.
I recently had a buyer offer $150,000 above the list price of a $500,000 home. Within hours the buyer started to have second thoughts. I represented the seller but something in my gut told me this was a worried buyer.
The buyer was dragging their feet about delivering the Option Fee and the Earnest Money. They were delaying in ordering a home inspection. I was becoming concerned for my seller.
I called the Buyer’s agent and expressed my concerns only to be told everything was ok. Yet, the next date the buyer terminated. I wasn’t surprised.
The buyer’s agent said the buyer was concerned that they were paying too much.
This buyer, like most in our market right now, signed an appraisal waiver with their offer. This means that if the home appraises for less than the sale price the buyer must bring the difference to closing on top of downpayment. In many instances this can be tens of thousands of dollars.
For example: If the buyer was getting a loan for 90% of the sale price then they were putting 10% down. On a $500,000 house that would be $50,000 plus closing costs of about $7500.00. If the appraisal came in $50,000 below the sale price, it means the buyer would now need to bring an additional $50,000 to closing. That’s a lot of cash.
Buyer’s remorse is the term used to describe the emotions a buyer feels when they begin to worry that they are paying too much for something. This often happens on big ticket items like cars, appliances, TVs, and houses. It’s a lot of money and we worry about paying too much.
Please watch the video above to learn more. And, call me with your questions at 512-516-4666.
